Syntel Sterling Best Shores Mauritius Limited v. The Trizetto Group, Inc.

Background

The defendants and counterclaim-plaintiffs, The TriZetto Group, Inc. and Cognizant Technology Solutions Corp., were referred to together as “TriZetto.” The plaintiffs and counterclaim-defendants, Syntel Sterling Best Shores Mauritius Limited and Syntel, Inc., were referred to together as “Syntel.” The court had previously ordered the parties to address whether damages measured by the costs allegedly avoided through unlawful conduct were available for the New York trade-secret misappropriation claim, and what effect that decision would have on the evidence presented at trial.

The order supplemented and modified the court’s September 30, 2020, order, which had granted in part and denied in part Syntel’s motion in limine seeking to exclude the testimony of Mr. Britven, an expert witness.

Ruling on Avoided-Cost Damages

The court determined that avoided-cost damages are not available for the New York trade-secret misappropriation claim under E.J. Brooks Co. v. Cambridge Security Seals. The court noted that although the dissent in that case questioned whether the majority’s decision applied only to legal damages and not damages in equity, the majority opinion contained no such limitation and addressed whether a plaintiff asserting trade-secret misappropriation claims under New York law could recover damages measured by costs the defendant avoided through unlawful activity.

As a result, Mr. Britven may testify about avoided-cost damages only to the extent the testimony is relevant to TriZetto’s damages on the federal trade-secret claim, referred to in the order as the DTSA claim. He may not testify about avoided-cost damages to the extent they are exclusively relevant to the New York claim. The jury will not be asked to provide an advisory verdict on avoided costs for the New York claim.

Syntel’s Request to Exclude the Evidence

The court rejected Syntel’s argument that avoided-cost evidence should be excluded from the federal claim as well. First, the court found that argument outside the scope of the issue the parties had been ordered to address. Second, the court treated the argument as apparently seeking reconsideration of the earlier ruling allowing Mr. Britven’s testimony, but Syntel had not identified or satisfied the requirements for reconsideration. Those requirements included an intervening change in controlling law, new evidence, or a need to correct a clear error or prevent manifest injustice.

Third, the court found Mr. Britven’s testimony sufficiently reliable and relevant for the jury to hear. The court said his opinion resulted from applying a reliable method to the facts of the case and was relevant to TriZetto’s damages on the federal claim. The court also concluded that the testimony’s usefulness outweighed any prejudicial effect. Whether Mr. Britven’s avoided-cost calculation was overstated or incorrect was described as a reasonable dispute for the jury to decide through cross-examination and competing evidence.

TriZetto’s Jury-Confusion Argument and Further Orders

The court also rejected TriZetto’s argument that deciding the New York damages issue before trial would confuse the jury. Instead, the court said an advance ruling would clarify which damages were available for each claim, including that avoided-cost damages were available only for the federal claim and not the New York claim.

The court ordered the parties to provide revised jointly proposed damages instructions by October 16, 2020. For remaining instructions, the parties were directed to use the substantive portion of the preliminary charge as the base, add proposed changes in redline, and submit them by October 19, 2020. They were also directed to submit a revised jointly proposed verdict form by October 19 and to attempt to resolve all objections jointly. Judge Lorna G. Schofield entered the order.